Ranpak Holdings: A Pivotal Turnaround in 2025

Ranpak Holdings Corp. (RPK) is emerging from a challenging first half of 2025 with a compelling narrative of strategic reinvention. After a net loss of $7.5 million in Q2 2025—compared to a $5.5 million profit in the prior-year period—the company has laid the groundwork for a significant margin recovery and long-term outperformance. This turnaround is driven by three pillars: aggressive cost discipline, a surging automation segment, and the tailwinds of North American e-commerce growth. For investors, the question is no longer whether Ranpak can recover, but how quickly it can outperform expectations in a post-restructuring era.

Strategic Automation: The Engine of Growth

Ranpak's automation segment has become the linchpin of its revival. In Q2 2025, automation revenue surged 34% year-over-year, with a robust backlog of $40–$45 million in projects expected to materialize by year-end. This growth is fueled by the insatiable demand for scalable, sustainable packaging solutions in e-commerce. As online retail continues to expand, enterprises are prioritizing automation to reduce waste, lower costs, and meet sustainability goals.

The company's automation systems, which replace traditional foam-in-place packaging with paper-based alternatives, are now in high demand. A key catalyst is the U.S. fiscal package allowing bonus depreciation, which incentivizes businesses to invest in capital-intensive projects. This has accelerated customer adoption, particularly among large e-commerce players in North America. CEO Omar Asali's assertion that automation is “at the early innings of adoption” underscores the segment's long runway for growth.

Cost Discipline and Margin Recovery

While automation revenue is a bright spot, Ranpak's broader financials have been under pressure. AEBITDA fell 15.8% year-over-year to $16.5 million in Q2 2025, driven by lower volumes in Europe and APAC and higher North American production costs. However, the company has implemented a series of cost-cutting measures that are expected to yield a 3–5-point gross margin improvement in North America by year-end.

These initiatives include a 3% global workforce reduction, carrier consolidation, and investments in in-house logistics assets. By Q4 2025, the full $8 million in annualized savings from these efforts should offset the $4 million warrant expense drag, restoring AEBITDA to a more sustainable trajectory. The company's updated guidance—$44.5–$54.5 million in second-half AEBITDA—reflects confidence in this margin recovery.

North American E-Commerce: A Tailwind with Legs

North America remains the cornerstone of Ranpak's strategy. The region's e-commerce sector, which grew 6.8% year-over-year in Q2 2025, is a natural fit for Ranpak's automation solutions. The company has deepened relationships with enterprise customers, leveraging its installed base of 145,000 packaging systems to upsell automation upgrades.

Moreover, Ranpak's Malaysia factory expansion is reducing lead times and improving access to Asian markets, while its new cushioning product—designed to compete with foam-in-place solutions—promises to enhance margin profiles. These innovations, combined with the U.S. bonus depreciation incentive, position the company to capture a larger share of the e-commerce packaging market.

Liquidity and Strategic Resilience

Ranpak's balance sheet provides further reassurance. With $49.2 million in cash and no debt on its $50 million revolving credit facility, the company has the flexibility to fund automation deployments and execute cost-cutting measures without diluting shareholders. Its $408 million first lien term facility, maturing in 2031, ensures long-term financial stability.

Investment Thesis: A Second-Half Rebound

For investors, the case for Ranpak is clear. The automation segment's EBITDA positivity in Q4 2025, coupled with margin improvements from restructuring, should drive a sharp rebound in profitability. The company's updated guidance—$83.3 million in full-year AEBITDA—suggests a path to profitability by year-end, assuming execution aligns with management's projections.

The risks are not insignificant: global economic uncertainty and execution delays could temper growth. However, Ranpak's strategic focus on automation, cost discipline, and e-commerce tailwinds creates a compelling risk-reward profile. With a P/E ratio of just 8.5x (based on 2025 estimates) and a forward EV/AEBITDA of 5.5x, the stock appears undervalued relative to its growth potential.

Conclusion: A Buy for the Long-Term

Ranpak Holdings is at a pivotal inflection point. The company's restructuring efforts, automation-driven growth, and alignment with e-commerce trends position it for a meaningful second-half rebound. For investors with a medium-term horizon, RPK offers an attractive opportunity to capitalize on a turnaround story with durable, long-term value.

In the words of Asali, “We are not just surviving the current environment—we are building for the future.” With automation as its engine and cost discipline as its foundation, Ranpak is poised to deliver outsized returns in 2025 and beyond.